Report: Municipal Health Coverage More Generous Than State, Business Plans04:08

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The rising cost of health insurance is squeezing municipal budgets across the state. A new report out said part of the reason is that coverage for municipal workers is much more generous than coverage the state or most businesses provide.

According to the report from the Boston Foundation and the Massachusetts Taxpayers Foundation, for family coverage the average municipal premium is $5,600, or 37 percent higher than the average private sector premium, 33 percent more than the federal plan premium and 21 percent more than the state's Group Insurance Commission plans. Taxpayers Foundation President Michael Widmer said these high-cost plans are cannibalizing municipal budgets.

“If we want to preserve those services and the jobs of union members, then we should give municipal officials the powers to change plan design, go from $5 to $20 co-pays, for example, outside of collective bargaining,” Widmer told WBUR's Morning Edition.

Union leaders are fighting such legislation. They say workers have agreed to lower wage increases in exchange for generous insurance. Widmer said that the changes proposed in the study would preserve a high-quality plan on par with the state’s GIC.

The title of the report, "Gilded Benefits from a Bygone Era," gets right to the heart of the issue, according to Widmer.

“Nothing has changed in these municipal plans to speak of in the last 40 years, and obviously in the rest of the state there have been enormous changes in the coverage of health plans, both public employees at the state level and private employees,” Widmer said.

Gov. Deval Patrick, who supports municipal health care reforms, said Tuesday that he had hoped a bill allowing cities and towns to enter into the more affordable GIC system would have been completed by now, since communities need time to transition to a new system.

If the coverage deemed unsustainable by the study continues to be offered, Widmer thinks the results will not only be a loss of municipal services but also fewer union jobs.